Gagging Order Changes to Enhance Protection for Whistleblowers

Non-disclosure agreements (NDAs) can be used to prevent the spreading of anything likely to damage an organisation’s reputation or can apply to sensitive commercial information or trade secrets.

In new guidance on NDA’s, Susan Clews, the chief executive of ACAS, said: “NDAs can be used legitimately in some situations, but they should not be used routinely or to prevent someone from reporting sexual harassment, discrimination or whistleblowing at work.”

ACAS’s announcement comes in the aftermath of one of the most notorious and high-profile cases surrounding gagging clauses and involving former film producer, Harvey Weinstein.

Zelda Perkins, a former assistant of Weinstein in the 1990’s, signed an NDA in 1998 after her colleague alleged that Weinstein had attempted to rape her.

The NDA legally prohibited her from speaking to anyone about the incident. But in 2017, after nearly two decades of silence, Perkins breached that agreement and became one of the first women to publicly speak out about Weinstein’s sexual misconduct.

Last week Harvey Weinstein was sentenced to 23 years in prison after being found guilty for a string of sexual assaults.

The widespread abuse of NDAs such as those found in the Weinstein case and global campaigns such as #MeToo has had a powerful effect on how employers are using NDA’ and the steps they are taking to protect and encourage employees to speak out.  

In the UK, the Equality Act 2010 sets out clear protections against sexual harassment in the workplace. Section 109 of the Equality Act 2010 reflects that employers may be vicariously liable for acts of discrimination, harassment and victimisation carried out by their employees in the course of employment. Regardless of whether they have approved, or are even aware of, their employees’ actions, the combined effect of these provisions means that an employer may be legally liable for sexual harassment carried out by their staff. 

Reasonable Steps

Section 109(4) specifies that employers have a legal defence if they can show that they took ‘all reasonable steps’ to prevent their employee from acting unlawfully. 

Businesses who have a robust and effective whistleblowing policy and procedure in place will have a greater defence against being made vicariously liable for acts of sexual harassment and victimisation carried out by their employees in the course of employment.

ACAS’s recent announcement that Non-disclosure agreements (NDAs) should not be used to stop workers from reporting sexual harassment or whistleblowing is clearly a step in the right direction. Legislation coupled with ACAS guidance reflect the need for whistleblowers to be seen as assets to businesses rather than liabilities. Those employers who fail to heed this warning are likely to pay a heavy price. 

AAB People provides a global whistleblowing service. If you would like more information on how we can help your organisation implement an effective whistleblowing solution to tackle harassment in the workplace, please don’t hesitate to contact us.